Monday, 1 May 1995
Volume 2, Issue 83
REGIONAL NEWS
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**HUNGARIAN PRIME MINSITER DISSATISFIED WITH WESTERN COMMITTMENT**
Hungarian Prime Minister Gyula Horn accused European countries
Saturday of being too concerned with their own problems and
not paying enough attention to Central and Eastern Europe.
Horn said the market reforms occuring in the region are
producing too many losers, and social tensions are rising. He
added that western help was needed to conquer the challenges
Hungary now faces. Horn also warned that political
instability in the region could destabilize the whole of
Europe.
**NATO HOPEFULS LEAN ON EACH OTHER**
Hungary and Poland will work together to join NATO. Following
two days of talks in Hungary, Polish Defense Minister Zbigniew
Okonski said the two countries have a common view and would
back each other when faced with opposition to their entry.
Okonski also said that Poland is interested in buying
Hungarian electronics for remote-controlled aircraft. Hungary
on the other hand is looking into Polish military
communications equipment.
**GOULASH IN SPACE**
The Hungarian government has agreed to lease four of the 16
transponders on a satellite to be built jointly by Israel
Aircraft Industries and Antenna Hungary. The move will enable
the two companies to move forward with the Magyarsat project.
The remaining space on the satellite will be marketed to
television stations in Central Europe. The Hungarian
government will pay $2.7 million per transponder per year, or
almost $120 million over the 11 year life span of the
satellite. The Magyarsat Satellite will be launched in 1998.
BUSINESS NEWS
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**HUNGARY'S POSTABANK WILL SEEK MARKET LISTINGS**
Postabank, Hungary's fifth largest bank, said it'll increase
capital over the next three years. In the first stage,
between $30 and $100 million will be raised, and the second
stage will accumulate between $10 and $50 million. Postabank,
which reported a $19 million profit last year, plans to list
the bank on stock exchanges in Hungary and abroad. Also
during the Postabank shareholders meeting last week, Hungarian
Prime Minister Gyula Horn warned banks not to expect any more
consolidation programs to help them cope with bad debts.
Government critics have said the programs reversed
privatization of commercial banks and led banks to expect
further state aid. A government spokesperson has said more
than $3 billion has been spent on bad company debts and
bank loans to help the country's banking system get back on
its feet.
**BUDAPEST CAN'T CORRAL THE BULLS**
A seven-session rise on the Budapest Stock Exchange (BSE)
reversed Friday. The BUX index closed at 13 68.74 points,
down 2.57. Pharmaceutical company Richter Gedeon declined 35
to 19 50. While food processor Globus ended at 15 10, up 40
points. Many traders had anticipated the sudden end to the
bullish run, as there were no major economic changes in
Hungary.
**SOFTWARE PIRACY RAMPANT IN FORMER EASTERN BLOCK**
According to the Business Software Alliance nearly 60 percent
of computer software used worldwide is pirated and former
eastern block countries are big offenders. In 1994 Poland,
Hungary and the Czech Republic were ranked among the top 10
software thieves, with an 85 percent piracy rate, accounting
for losses of $410 million to software companies.
BUSINESS FEATURE
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**FOREIGNORS TESTING CENTRAL EUROPEAN INVESTMENT WATERS**
By Tom Hoover
Last week saw a promising return of investor confidence to
Central European markets. Although share prices were mixed in
Prague, Bratislava and Ljubljana, Budapest and Warsaw gave
strong performances and blue chip stocks were the big winners.
CET spoke with Tom Chadwick of Smith New Court in London and
asked him if there's been a re-awakening in Budapest.
Chadwick: Yes, Hungary is doing slightly better off the back of
the Polish market. Foreign investors have been looking
particularly at Poland and saying 'yes evaluations are getting
quite expensive' and looking at other areas, in particular
Hungary. People are looking at Hungary and saying 'yes
evaluations are quite cheap'. It's just a timing thing.
CET: What specifically has to happen in Prague for the PSE to
follow suit with the other markets?
Chadwick: One thing that is happening in Prague which may not
be happening in the Hungarian market is that first quarter
earnings results are due out. We've seen some reasonably good
first quarter earnings. Volumes in the Czech Republic this
week have been between $25 and $40 million daily volumes which
is good. In terms of the kind of stocks that've been moving,
we've seen SPT, Komercni Bank, Tabak, CEZ, basically the blue
chips which does indicate that there is foreign interest in
the market and a lot of people are saying we're on the cusp of
a turning point in the Czech Republic.
CET: Foreign Investors have been returning to Budapest. What
have they been buying?
Chadwick: The main stocks they've been buying are Pick and Egis
and Richter. Those have been the real movers. Fotex has been
performing quite well, it moved up from its low of 149, in
fact it touched 190 forints yesterday, which is a clear sign
that people are starting to buy those stocks which are liquid,
which can be traded and which have underperformed.
CET: And the active issues in Warsaw?
Chadwick: We've seen stocks like Universal and Sokloff,
clearly stocks which are bought by the domestic investors
moving. I think foreigners are still sitting on the sidelines
a little bit this week basically looking for value and
cheapness.
CET: What's your assessment of the impressive market for the
week?
Chadwick: Clearly the most money you could have made was in
Poland still. But probably the most positive sign has been
the Budapest market which has really started to show signs
that foreign investors are coming back and I think for
investors to start coming back into Hungary means that there
has been some confidence rebuilt.
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A tovabbterjesztest a New York-i szekhelyu Magyar Emberi Jogok
Alapitvany tamogatja.
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